Manorial Rights Indemnity Insurance Bank conveyancing requirements
Bank of Scotland and Natwest, as with the majority of lenders, set their own specific instructions when it comes to manorial rights indemnity insurance. This page is designed to help conveyancing practitioners on the various mortgage company solicitors panel where the title for the the property to be mortgaged contains manorial rights. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each bank, for example Birmingham Midshires, Barnsley BS or Skipton. The information on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Halifax and Barclays like the majority of mortgage companies, obligations require that where manorial rights indemnity insurance is effected:
- the limit of indemnity must meet the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- your practice must supply a duplicate of the manorial rights indemnity insurance to the mortgagor and explain to the borrower why the manorial rights indemnity insurance policy was effected and that a further policy could be mandatory if there is additional lending against the security of the property
- the manorial rights indemnity insurance policy must not contain conditions that you recognise would void or compromise the interests of the lender
- your practice must reveal to the insurer all relevant information which you have gathered
- you must point out to the mortgagor that the borrower must adhere to any conditions of the manorial rights indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in respect of the policy
- the manorial rights indemnity insurance policy must be effected at no charge to the mortgage company
- your firm must approve the terms of the manorial rights policy on behalf of the mortgage company
- the manorial rights indemnity insurance policy should always be in favor of the bank and, wherever possible, for the benefit of the mortgagor and any next registered proprietor or bank. Where the mortgagor will not be protected by the manorial rights indemnity insurance policy, the borrower needs to be advised accordingly.
| Lender | Requirement |
|---|---|
| Accord Mortgages | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Aviva Equity Release | Full value of the property. |
| Bank of Ireland | The limit of indemnity must be an amount not less than the market value of the property. |
| Chelsea Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Habito | Higher of purchase price or valuation |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Investec | The open market value of the property according to the valuation report. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| LendInvest | An amount at least equal to the valuation of the property. |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Secure Trust Bank | An amount at least equal to the market value. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS- First Active | An amount equal to the value of the property. |
| Ulster Bank | An amount equal to the value of the property. |
| Yorkshire Bank | Open market value of property. |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Non lender-specific considerations
The full terms, conditions and exclusions for manorial rights indemnity insurance are shown in the policy document. Conveyancing Practitioners are obliged to direct your non-lender client to the manorial rights indemnity insurance policy paperwork. Manorial Rights Contingency insurance is designed to afford indemnity in respect of the risks set out in the policy schedule - so you should check the document to determine that it is as it should be. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Significant aspects and benefits of manorial rights indemnity insurance :
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the manorial rights indemnity insurance schedule. Manorial Rights indemnity insurance Cover normally includes- The out of pocket expenses of altering or destroying all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Loss in market value resulting from the successful enforcement of the risks specified in the manorial rights indemnity insurance.
- Cover for compensation incurred in any proceedings concerning the risks specified in the manorial rights insurance, as well as fees of a legal nature.
- Money paid with consent in writing from the insurance company to free the land from the risks specified in the manorial rights indemnity insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Expenses for works (including professional fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the manorial rights indemnity insurance, to the extent that such costs are rendered abortive by court order.
Always consider what is not included in the manorial rights insurance e.g. does the policy cover any property that has been altered within the 12 months prior to the policy being put on risk? Are legal costs covered?
Manorial Rights Indemnity Insurance has limitations - Further considerations
Manorial Rights Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that manorial rights indemnity cover will not necessarily be the right solution. Information provided on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender solicitor panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information is in relation to properties in England and Wales.